Question

The following items were derived from Woodbine Circle Corporation’s adjusted trial balance on December 31, 2016:

Other financial data for the year ended December 31, 2016:
Federal Income Taxes
Paid with federal income tax return .... $700,000
Accrued .............. 200,000
Total income tax expense (estimated) .... $900,000
Tax rate on all types of taxable income .. 40%
Discontinued Operations
On September 30, 2016, Woodbine sold its Auto Leasing (AL) Division for $4,000,000. The book value of this division was $4,250,000 at that date. For financial statement purposes, this sale was considered as a discontinued operation of a component of the company.
Capital Structure
Common stock, par value $1 per share.
Number of shares outstanding during all of 2016 .......... 1,000,000
Required:
Using the multiple-step format, prepare a formal income statement for Woodbine for the year ended December 31, 2016, together with the appropriate supporting schedules. All income taxes should be appropriately shown.